Investor · Charlotte NC · Member since 2023 · 6 posts · 2 votes
Hi everyone
Trying to set up a LLC for our first rental property in NC. I wanted to keep it simple and form a single member LLC. Wanted to form it with both me and my wife.
From my research it appears that I cannot use the Qualified Joint Venture to form a single member LLC for husband+wife, because I live in NC which is not a community property state.
1. Should I open a multi member LLC? I would rather not due to more complexity and cost
2. Open single member LLC under myself and then put LLC interest in a trust so that my wife can gain control if something happens to me?
1. probably the easiest and least complex options - also should not be really any more cost than opening a single member entity tbh...ensure that dissolution clauses are properly drafted for you both being on title
2. for one rental property, this is overkill (although there are many people that will say you need to do this...the maintenance and cost of a trust for one rental property is likely not profitable)
3. personal name with good insurance policy if you're worried about liability
Happy to go over ideas. I'm a lender and attorney in the state of illinois, so while this is not
1. probably the easiest and least complex options - also should not be really any more cost than opening a single member entity tbh...ensure that dissolution clauses are properly drafted for you both being on title
Wrong answer. This is why we accountants should not give legal advice and - vice versa - attorneys should not give tax advice. :)
@Ather Taqui - you're correct. A multi-member H/W LLC in NC will require filing a partnership tax return. It increases complexity and cost dramatically and thus should be avoided.
Whether you need an LLC at all and other legal protection issues - now that indeed is for attorneys to answer.
1. probably the easiest and least complex options - also should not be really any more cost than opening a single member entity tbh...ensure that dissolution clauses are properly drafted for you both being on title
Wrong answer. This is why we accountants should not give legal advice and - vice versa - attorneys should not give tax advice. :)
@Ather Taqui - you're correct. A multi-member H/W LLC in NC will require filing a partnership tax return. It increases complexity and cost dramatically and thus should be avoided.
Whether you need an LLC at all and other legal protection issues - now that indeed is for attorneys to answer.
This is such a wild take I don't even know what to say. Your position is that setting up a multi-member LLC is more expensive than a trust...lol
1. probably the easiest and least complex options - also should not be really any more cost than opening a single member entity tbh...ensure that dissolution clauses are properly drafted for you both being on title
Wrong answer. This is why we accountants should not give legal advice and - vice versa - attorneys should not give tax advice. :)
@Ather Taqui - you're correct. A multi-member H/W LLC in NC will require filing a partnership tax return. It increases complexity and cost dramatically and thus should be avoided.
Whether you need an LLC at all and other legal protection issues - now that indeed is for attorneys to answer.
This is such a wild take I don't even know what to say. Your position is that setting up a multi-member LLC is more expensive than a trust...lol
You're totally missing the point because you're looking through the narrow lenses of your trade. Setting this up is only one piece. I'm talking about the hassle and cost of annual tax compliance EVERY year thereafter: partnership tax return vs part of a personal tax return.
1. probably the easiest and least complex options - also should not be really any more cost than opening a single member entity tbh...ensure that dissolution clauses are properly drafted for you both being on title
Wrong answer. This is why we accountants should not give legal advice and - vice versa - attorneys should not give tax advice. :)
@Ather Taqui - you're correct. A multi-member H/W LLC in NC will require filing a partnership tax return. It increases complexity and cost dramatically and thus should be avoided.
Whether you need an LLC at all and other legal protection issues - now that indeed is for attorneys to answer.
This is such a wild take I don't even know what to say. Your position is that setting up a multi-member LLC is more expensive than a trust...lol
You're totally missing the point because you're looking through the narrow lenses of your trade. Setting this up is only one piece. I'm talking about the hassle and cost of annual tax compliance EVERY year thereafter: partnership tax return vs part of a personal tax return.
And I was not comparing to a trust, by the way.
Thank you both for your replies. Looks like I have some more homework to do
How about opening up single member LLC under myself and putting TOD clause to my wife in the operating agreement. Pros and cons to this?
From my research it seems not all states allow this however I can't find what the law says for NC..